Muthoot Finance, Manappuram Finance shine 5% as gold prices hit record highs

Jefferies holds a positive outlook on both Muthoot and Manappuram, having a 'buy' call on both.

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26 Aug, 2025 12:21

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Shares of gold financiers-Muthoot Finance and Manappuram Finance were buzzing in trade on September 13, surging 5 percent each as gold prices soared to a record high. Gold prices surged to a record high on Friday, surging past the $2,550-mark, as the dollar weakened, driven by expectations of imminent cuts in US interest rates.

Meanwhile, a spike in central bank purchases of the yellow metal, coupled with hedging bets amid uncertainties around geopolitical crises in the Middle East and East Europe, a crucial US Presidential election and the Bank of Japan's rate trajectory, paints a bullish outlook for gold in the near term.

This strength in prices of the yellow metal bodes well for gold financiers as it lifts the value of the collateral. This reduces the risk of default, as the collateral becomes more valuable relative to the loan amount issued against it.

As a result, shares of Muthoot Finance zoomed 5 percent to a record high of Rs 2,078.75 on the NSE on September 13 while Manappuram Finance also gained 5 percent to an intraday high of Rs 216.50.

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Tracking the consistent spike in gold prices through the year, shares of Manappuram Finance have surged close to 33 percent and those of Muthoot Finance delivered 50 percent gains in 2024 so far.

Jefferies also holds a positive outlook on Muthoot and Manappuram, citing the rise in gold prices, stabilising competition from banks, and a temporary ban on peer, India Infoline Finance's (IIFL) gold loan business as key factors.

The brokerage has a 'buy' rating for both stocks, with a price target of Rs 2,220 for Muthoot Finance and Rs 270 for Manappuram Finance.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.